§1715z–14. Reinsurance contracts

(a) Demonstration mortgage reinsurance program; areas; number of mortgages

The purpose of this section is to authorize a demonstration mortgage reinsurance program designed to test the feasibility of entering into reinsurance contracts with private mortgage insurers in order to reduce Government risk and administrative costs, and to speed mortgage processing. The Secretary shall limit the demonstration under this section to not more than two administrative regions of the Department of Housing and Urban Development, and shall assure that the program is in the financial interest of the Government and will not result in loss of employment by any employees of the Department of Housing and Urban Development before March 15, 1988. The aggregate number of mortgages insured under this section in any administrative region of the Department of Housing and Urban Development in any fiscal year may not exceed 10 percent of the aggregate number of mortgages and loans insured by the Secretary under this subchapter in such region during the preceding fiscal year.

(b) One- to four-family dwellings; requirements for private mortgage insurance companies

Notwithstanding any other provision of this chapter inconsistent with this section, the Secretary is authorized to provide mortgage insurance with respect to one- to four-family dwellings under sections 1709(b), 1715y, and 1715z–10 of this title through reinsurance contracts with private mortgage insurance companies which have been determined to be qualified insurers under section 1717(b)(2)(C) of this title. Such contracts shall require private mortgage insurance companies to-

(1) assume a percentage of loss on any mortgage insured pursuant to section 1709(b), 1715y, or 1715z–10 of this title covering a one- to four-family dwelling, which percentage of loss shall be set forth in the reinsurance contract; and

(2) carry out (under appropriate delegation) such credit approval, appraisal, inspection, commitment, claims processing, property disposition, or other function as the Secretary pursuant to regulations, shall approve as consistent with the purposes of this section.

(c) Required contract provisions

Any contract of reinsurance under this section shall contain such provisions relating to the sharing of premiums on a sound actuarial basis, establishment of insurance reserves, manner of calculating claims on such insurance, conditions with respect to foreclosure, handling and disposition of property prior to claim or settlement, right of assignees, and other similar matters as the Secretary may prescribe pursuant to regulations. Pursuant to a contract under this section, a private mortgage insurance company shall endorse loans for insurance and take such other actions on behalf of the Secretary and in the Secretary's name as the Secretary may authorize.

(d) Mortgages offered for inclusion by Secretary

The Secretary shall require any private mortgage insurance company participating in the program under this section to provide reinsurance for those mortgages offered by the Secretary for inclusion in the program.

(June 27, 1934, ch. 847, title II, §249, as added Pub. L. 98–181, title IV, §428(a), Nov. 30, 1983, 97 Stat. 1219 ; amended Pub. L. 99–120, §1(g), Oct. 8, 1985, 99 Stat. 502 ; Pub. L. 99–156, §1(g), Nov. 15, 1985, 99 Stat. 815 ; Pub. L. 99–219, §1(g), Dec. 26, 1985, 99 Stat. 1730 ; Pub. L. 99–267, §1(g), Mar. 27, 1986, 100 Stat. 73 ; Pub. L. 99–272, title III, §3007(g), Apr. 7, 1986, 100 Stat. 105 ; Pub. L. 99–289, §1(b), May 2, 1986, 100 Stat. 412 ; Pub. L. 99–345, §1, June 24, 1986, 100 Stat. 673 ; Pub. L. 99–430, Sept. 30, 1986, 100 Stat. 986 ; Pub. L. 100–122, §1, Sept. 30, 1987, 101 Stat. 793 ; Pub. L. 100–154, Nov. 5, 1987, 101 Stat. 890 ; Pub. L. 100–170, Nov. 17, 1987, 101 Stat. 914 ; Pub. L. 100–179, Dec. 3, 1987, 101 Stat. 1018 ; Pub. L. 100–200, Dec. 21, 1987, 101 Stat. 1327 .)

Amendments

1987-Subsec. (a). Pub. L. 100–200 substituted "March 15, 1988" for "December 16, 1987".

Pub. L. 100–179 substituted "December 16, 1987" for "December 2, 1987".

Pub. L. 100–170 substituted "December 2, 1987" for "November 15, 1987".

Pub. L. 100–154 substituted "November 15, 1987" for "October 31, 1987".

Pub. L. 100–122 substituted "October 31, 1987" for "September 30, 1987".

1986-Subsec. (a). Pub. L. 99–430 substituted "September 30, 1987" for "September 30, 1986".

Pub. L. 99–345 substituted "September 30, 1986" for "June 6, 1986".

Pub. L. 99–289 substituted "June 6, 1986" for "April 30, 1986".

Pub. L. 99–272 made amendment identical to Pub. L. 99–219. See 1985 Amendment note below.

Pub. L. 99–267 substituted "April 30, 1986" for "March 17, 1986".

1985-Subsec. (a). Pub. L. 99–219 substituted "March 17, 1986" for "December 15, 1985".

Pub. L. 99–156 substituted "December 15, 1985" for "November 14, 1985".

Pub. L. 99–120 substituted "November 14, 1985" for "September 30, 1985".

Evaluation of Reinsurance Program; Report to Congress

Section 428(b) of Pub. L. 98–181 provided that: "The Secretary of Housing and Urban Development shall evaluate the reinsurance program under section 249 of the National Housing Act [this section] and, not later than March 1, 1985, submit to the Congress a report setting forth the results of such evaluation. Such report shall include an evaluation of the possible effect of a reinsurance program on the characteristics of the pool of mortgages remaining wholly under the applicable insurance funds and the actuarial soundness of such funds under such conditions."